Trustees get leave to
challenge charge on 129-
year-old temple land
The Federal Court says the four applicants meet the threshold set by Section 96 of the Courts of Judicature Act to have the merits of their appeal heard.
Justice Abang Iskandar Abang Hashim, who chaired a three-member bench, said the five questions of law posed by G Suppiah, M Supramaniam, A Narayanan, and T Kalimuthu had crossed the threshold set by Section 96 of the Courts of Judicature Act to have the merits of their appeal heard.
This means the applicants have shown that the proposed appeal contains novel legal questions of public importance which are being raised for the first time.
Also on the panel which heard the application yesterday were Justices Nallini Pathmanathan and Rhodzariah Bujang.
The Sri Veeramakaliamman temple in Jelutong, Penang, was established as a charitable trust under an instrument dated March 12, 1896.
The founding trustees bequeathed three lots of land to the temple. Two lots – Lots 83 and 84 – were earmarked in the trust indenture to serve as burial plots.
Subramaniam Muthusamy and his wife Lalidah Sinnasamy were the former trustees of the temple, dating back to 1995.
Having set up a development company, they attempted to develop apartments on the burial plots.
In March 2014, the current trustees sued the couple, alleging several breaches of trust.
On Oct 17, 2016, the High Court in Penang appointed the current trustees to head the trust, replacing the former trustees.
Meanwhile, to develop the two lots, Subramaniam and Lalidah applied to CIMB Bank Bhd for a loan of about RM800,000 and a further sum of RM3.5 million.
As security, the bank entered a charge on the two plots.
When the former trustees defaulted on the loan, CIMB applied for permission to sell the land through a charge action.
The four current trustees intervened and challenged CIMB’s application for an order for sale.
On June 23, 2020, the Penang High Court refused to allow the sale of the land.
The bank appealed to the Court of Appeal which overturned the High Court decision, allowing the land sale and giving rise to the present application for leave to appeal.
Counsel for the applicants, GK Ganesan, argued that neither the former trustees nor the bank had obtained the permission of the attorney-general to enter the charge. This was mandatory under Section 9 of the Government Proceedings Act 1956, he said.
He said none of the parties had applied for the attorney-general’s permission to sell the land.
“Under Section 21(2) of the Trustee Act 1948, the properties of charitable trusts cannot be used as security for loans from banks,” said Ganesan.
Counsel B Jeyasingham, appearing for CIMB, said the bank was inadvertently caught up in the suit as it had loaned money while being in the dark about prior litigation.
Senior federal counsel Al Saifi Hashim, appearing as amicus curiae, said that the attorney-general was the guardian of all charitable properties.
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